Wisma MCA is located in Jalan Ampang, next to Menara Atlan and opposite Bank of China in Plaza OSK. The gross development value of the project — comprising offices, a hotel, sky lounge and restaurant — is expected to be as much as RM1 billion, based on a back-of-the-envelope calculation.

The Edge did not receive a response to questions sent to the MCA office. Calls and messages to party president Datuk Seri Liow Tiong Lai also went unanswered. But documents sighted by The Edge show that plans to redevelop the site were initiated last October, prior to the 14th general election in May, during which the party received a drubbing at the polls.

MCA’s initial development proposal submitted to Dewan Bandaraya Kuala Lumpur (DBKL) shows that it had planned to build a single tower with office space, 253 hotel rooms, 46 serviced apartments and seven storeys of underground parking. Conditional approvals from DBKL were obtained in November.

However, on July 13, MCA submitted a revised proposal. Under the new proposal, the association plans to tear down the existing 23-storey building and build a 70-storey tower with an eight-storey basement carpark, a 328-room hotel that will occupy 24 floors and a two-storey sky lounge and restaurant on the 68th and 69th floors. The remaining floors have been allocated for office space. City Hall gave its approval on Aug 2.

A land title search conducted at the Kuala Lumpur Federal Territory Lands and Mines Office shows that the land — a freehold plot measuring 4,955 sq m or 53,335 sq ft — was registered to MCA in 1983.

It is not clear why MCA is redeveloping the site or if it plans to retain the building for recurring income, or even if the association intends to divest the building in part or in its entirety.

However, recurring profit from its major investment in its flagship company, The Star Media Group, has been dwindling in recent years amid the changing media landscape.

MCA holds a 43% stake in the media company, which a decade ago achieved a profit of RM138.7 million on the back of RM831.04 million in revenue in the financial year ended December 2008 (FY2008). In FY2017, however, profit and revenue had eroded to RM87.44 million and RM517.73 million respectively.

Industry experts are of the view that unlocking the value of the asset is a good idea, but the timing has to be right.

“Wisma MCA is located in a very strategic and prominent location in Kuala Lumpur City Centre. It is within walking distance of the Ampang LRT Station as well as the Ampang Park MRT Station. Hence, accessibility is exceptional,” Stanley Toh, executive director of valuation firm LaurelCap, tells The Edge.

“However, the timing is not conducive as the country is experiencing an economic slowdown, with the property market experiencing an oversupply in high-rise apartments/condominiums around the Klang Valley.

“The location of the land and tenure is only worthy of a grand and pristine development, in which (present) case the current market is unable to absorb. Foreign purchasers are just a handful while the Malaysian property market is largely supported by local demand.

“Therefore, launching a project within the next three years would not be the best opportunity to realise the highest and best return on investment at the present time,” he adds.

Adzman Shah Mohd Ariffin, the CEO and chief real estate consultant of ExaStrata Solutions Sdn Bhd, says at 23-storeys, the development potential of Wisma MCA has not been optimised. “By redeveloping, they are able to unlock its optimal value.

“Clearly, the market is in an oversupply situation in the city centre,” he adds, stressing that developers must be aware that absorption will remain challenging over the next three to five years, especially in the city.

“But, there are pockets of opportunity for iconic developments with the right concept and which comply with international standard Grade A,” he says.

An additional factor in its favour, he points out, is the potential for the take-up rate to be encouraging given its location and proximity to the transit stations. But the competition will be stiff as other sites in Jalan Ampang are also undergoing development changes.

A stone’s throw from Wisma MCA, Singapore’s Oxley Holdings Ltd is building the Oxley Tower Kuala Lumpur City Centre, which is a freehold mixed-use development. Undertaken by its locally incorporated subsidiary Oxley Rising Sdn Bhd, the development will comprise two 79-storey high-rise towers and a 28-storey block on a 3.1 acre freehold site.

Oxley’s website states that The Jumeirah Kuala Lumpur Hotel will offer 181 hotel rooms and Jumeirah Living Kuala Lumpur Residences 267 residences, and SO Sofitel Hotel 207 hotel rooms and SO Sofitel Residences 590 home units. Both hotels are scheduled for completion in 2023.

The development’s total gross floor area is an estimated 1.89 million sq ft, and all three buildings will be linked by a retail podium.

W Kuala Lumpur opened its doors on Aug 23. The hotel, built on the site of the former Bok House 1.7km away from Wisma MCA, features 150 guestrooms and suites.

A month earlier, the Four Seasons Hotel Kuala Lumpur unveiled its 209 rooms and 27 units of serviced apartments.

Timing appears to be an issue.

In 2015, MCA tried to dispose of Menara Multi-Purpose in Kuala Lumpur for an estimated RM410 million. Four years earlier, the association had paid Multi-Purpose Holdings Bhd RM375 million for the 43-storey building, a 34-year-old office block located in Capital Square in Jalan Munshi Abdullah. It is understood that the building has yet to be sold.